Private Market Evergreens in High Demand, Morgan Stanley Says

Morgan Stanley's Elizabeth Dennis reports significant investor demand for evergreen funds in private markets, driven by clients seeking access to companies that are choosing to remain private for extended periods. This trend highlights a strategic shift towards private asset allocation among institutional investors, while individual investors largely remain excluded from these opportunities.

Analysis

A senior Morgan Stanley executive has highlighted significant and growing client demand for evergreen funds as a primary vehicle for accessing private markets. According to Elizabeth Dennis, the firm's global head of client coverage, this trend is driven by a structural market shift where an increasing number of companies are opting to remain private for longer durations. This delays or removes opportunities for public market investors, compelling institutional and high-net-worth clients to seek exposure through private asset structures. The statement underscores the strategic importance of private market access in client portfolios and positions firms with strong private asset platforms, like Morgan Stanley, as key beneficiaries. However, the analysis also points to a significant market segmentation, noting that individual investors remain largely excluded from this high-demand asset class.

Key Decisions for Investors

• Asset managers should prioritize developing or expanding their evergreen private market fund offerings to meet significant client demand and compete with established players like Morgan Stanley.
• Institutional investors should consider increasing allocations to private market funds to capture the value of companies that are extending their pre-IPO growth phase.
• Investors should monitor for disruptive fintech platforms or regulatory changes that could democratize access to private assets, as the current model largely excludes individual investors, presenting a potential long-term opportunity.